How To Tell Things Are Going Badly In Washington

April 4, 2013 9 Comments

New jobless claims are up to 385,000, an increase of 28,000 over last week. No doubt the administration has some sort of excuse for the increase. Instead of discussing the economy, Obama is busy campaigning for Nancy Pelosi and the Democrats. She’s apparently the sort of Speaker we should desire as she never puts ideology above doing what’s right. Yes, Obama was serious when he suggested that. Please stop laughing. If that doesn’t distract the public, perhaps Obama should send senior advisors out to complain about the Drudge Report and how it “hurts what we’re trying to do.” No, wait, they’ve done that.

The economy isn’t really gaining any strength, which is cause for ignoring the economy if you’re a Democrat. There are other things to ignore as well, such as the administration’s  inability to get the Obamacare exchanges up and running next year. We’ll have to “suffer” without the exchanges until 2015. Obamacare is collapsing in on itself as the regulators are unable to write coherent regulations and get the system up and running. It behooves the administration to ignore this problem, just like the economy.

The administration reaction to bad news is to ignore it and campaign. Obama has made it his goal to win the House back for the Democrats. He and the Democrats have a number of problems heading into 2014 beginning with Obama himself. Historically President’s who campaign for their party in midterm elections tend to lose. The last midterm, 2010, is a good example. Obama campaigned more than any other sitting President has before during the 2010 midterm and he lost big. The Democrats second problem is that Obama’s personal fundraising arm, Organizing for Action, is competing for Democrat money with the DNC and other party affiliated campaign funds. Lack of a single strategy and single source of funds will dilute the Democrats message and limit their slim chances of victory.

Of course when news isn’t good it’s best to focus on other things. As such Obama is talking about the next election rather than the daily dose of bad news coming from Washington. Add to that a dose of media blaming, always a sign of desperation from the White House. It’s one thing for surrogates to blame the media, it’s another thing when White House advisers point the finger at the media. It’s no surprise they’re going after Drudge. despite his conservative leanings, the left-wing media flocks to the Drudge Report. Obama is trying to get them to knock it off but the fact is reporters desire to have their stories linked on Drudge because a link from his website equals tens of thousands of additional hits for an article and increased notoriety for the writer.

Of course it’s Drudge’s fault that the Obama administration, with its adoring media, cannot get his message out properly. It’s almost comical that anyone in the administration would make such a statement. It had it’s intended effect though, we forgot all about the jump in new unemployment numbers and the Obamacare regulation problems. When this administration starts focusing on nonsense issues (for the administration anyway) and campaigning we know things aren’t going well. As things get worse over the next few weeks and months it ought to be fascinating to see how far they take this.

Filed under socialism Tagged with , , , , , , ,

Recent Stock Market Gains Are A Fraud

March 14, 2013 16 Comments

The stock market is booming, posting nine straight days of positive gains. The Dow is hovering around 14,500, NASDAQ and S&P 500 are all up substantially. You would think the economy is booming and  yet there really are no signs of a booming economy. Unemployment is still high, going down only because the government continues to remove the long term unemployed from the ranks of the workforce. Incomes aren’t up but food stamp use is. Manufacturing hasn’t increased, consumer confidence is nowhere near the level where one might say the economy is booming. In short, this increase in the stock market that we’ve seen over the last few months is nothing short of a fraud.

Those in the financial world will so much as tell you that the market is booming because of the Fed’s quantitative easing (QE) program. QE is a fancy word for printing money. In other words, the stock market is booming because investors are playing with newly printed money. They aren’t investing capital from a booming economy in the market. QE is why an otherwise stagnant economy is seeing a massive stock market boom. It’s essentially a gigantic fraud and like most Fed created gigantic frauds it’s going to collapse.

Of course when it collapses the Fed won’t get the blame. The media won’t even blame Obama for it, though the public has a tendency to blame stock market collapses on whoever the President happens to be. The media and the administration will blame Wall Street investors who are “gambling” Americans 401k money and squandering retirements. One wonders where those people are right now when 401k’s are ballooning due to fake, inflated money from the Fed. No one complains during a market boom, they only want to point fingers after the bust. This includes Obama, whose campaigns have been funded by the same people on Wall Street that he’ll blame when all of this busts out.

With the Fed printing money like a small time mafia counterfeit ring, it’s only a matter of time before serious inflation starts to hit. Arguably it already has. Gas is permanently above $3/gallon. Anyone who goes to the grocery sees a massive increase in the price of staples like meat and bread. New cars are getting out of the price range of middle class Americans. When the government determines inflation, they pick and choose which items get included in their basket. They try to minimize official inflation because it’s in the government’s best interest to publicly minimize how much inflation there is because the public tends to blame those in power.

While we’ve already seen inflation hit the middle class, it’s only going to get worse. Eventually investors will get jittery about inflation and an artificially high stock market. Then they’ll try to sell everything and the market will drop dramatically. It’s a matter of time because this market increase isn’t based on real economic news. It has nothing to do with the economy booming, it has nothing to do with anything tangible. Wall Street is playing with phony money and they’re making a fortune doing it. But it’s going to collapse, it’s a matter of time. We can’t expect endless stock surges when the underlying economy is fragile and stagnant.

Filed under economy Tagged with , , , , , , ,

Minimum Wage Proposal Distracts From Obama’s Tax Increases On Poor

February 14, 2013 4 Comments

On Tuesday we were all supposed to walk away from Obama’s State of the Union speech believing the President truly cared about the middle class. He’s going to tax those rich robber barons to death and spread the wealth around to all of us. He’s going to raise the minimum wage, which doesn’t exactly help the middle class but it sure shows he cares about the masses. In other to believe all of this we would have to ignore his actions of less than two months ago. Remember, it is this President who proudly signed into law a tax increase for 80% of Americans. How soon we forget.

Tax increases lead to less consumer spending. Less consumer spending leads to fewer jobs, less pay and general stagnation in the economy. The economy shrunk during the 4th quarter last year. Unemployment continues to hover around 8%, it would be even higher if the government didn’t indiscriminately remove tens of thousands of the unemployed from the workforce for no discernible reason. We aren’t creating jobs in the numbers necessary to keep up with population growth. Increasing taxes have done nothing to  make the economy stronger. It barely makes a dent in Washington’s $1 trillion budget deficit.

Yet Obama cares about the little guy because he wants a minimum wage increase. How disingenuous can this President get? This is a President who just raised taxes on the lower and middle class by 2%. We’re not even talking about a 2% income tax hike which would be subjected to deductions, we’re talking about a social security tax hike. This 2% is on all of your employment income, you get no deductions or personal exemptions. Obama acted like letting the Bush tax cuts expire was some sort of big hit on the rich. In fact, the bill Obama lobbied for and signed was a big hit on working Americans. Now he wants to turn around and increase the minimum wage? Why doesn’t he cut our taxes first?

There is nothing that would be worse for our economy than a minimum wage increase. Not with over 12 million counted as unemployed in this country. At this point $7.25/hour is already a barrier to enter the workforce. Increasing the minimum wage by nearly $2/hour does nothing for the 12 million unemployed and it likely hurts those currently earning minimum wage. It’s not like we have low unemployment and a booming economy. In the labor market, it’s a buyers market and that means lower wages. If government indiscriminately raises the minimum wage, it’s once again going to be unskilled workers who bare the brunt of Obama’s intrusive government. Already suffering a draconian tax increase, they will now suffer a loss of their job or loss of hours.

Obama couldn’t care less about any of these problems he’s creating. If anything, more unemployed unskilled workers is a good thing. They’ll get on welfare and be ever more dependant on the government. His goal is to create a permanent underclass of Democrat voters. The President exposes how little he cares for the lower class by proudly increasing their taxes by 2%. We won’t even pretend he cares about moving these people up into the middle class, he doesn’t care much for the middle class either as evidenced by his middle class tax increases and failed promise not to raise taxes on those making less than $250,000. A minimum wage increase, which has no chance of passing through Congress, is nothing but a shiny object meant to distract us from the fact that Obama raised our taxes.

Filed under Taxes Tagged with , , , , , , , ,

Long Term Economic Weakness A Near Certainty

February 1, 2013 10 Comments

The economy is a mess as the numbers we’ve seen lately tell us. Earlier this week it was reported that fourth quarter GDP dropped 0.1%. Back in 2007 the AP declared a quarter of economic decline was a sign of a recession. These days the AP whines that economic “jitters” are competing with Obama’s progressive agenda. Yesterday the government reported an increase in new unemployment claims of 38,000. Reuters tried to soften the number claiming it’s within a range for “job growth.” It’s a pretty substantial gain over the previous week to believe we’re looking at any kind of serious job growth. January unemployment increased to 7.9% with 157,000 new jobs. As usual during the last four years, not enough jobs to cover population growth.

This is all the Republicans fault of course. The media, Democrats and Obama administration all blame the GOP for poor economic news. They’ve done away with blaming Bush, now it’s just generic “Republicans” that are to blame. Harry Reid bloviated that the GOP needs to stop “bad mouthing” the economic recovery. Citing statistics is a sign of “bad mouthing” in the world of Democrats. We can’t have any of that because it might undermine the ability of the left to force through gun control and amnesty for illegals in the next 24-48 hours.

Everything Obama wants to do has to be done immediately, or so he’s been arguing. The less debate the better for him. Bad economic news ruins his ability to force though his progressive agenda, perhaps as much as Republican opposition in the House. None of this economic news is particularly surprising, which is why Obama is pushing so hard right now. His second administration is likely to be dominated by the economy. Obama’s tax increases on 80% of Americans is having a profoundly negative effect on the economy. Obamacare kicks in soon with the cheapest acceptable plan costing $20,000 per family according to the IRS. Can’t afford that? You’ll be taxed around $2,000.

We have massive economic problems and we don’t have a President or a Congress capable of tackling them. We have a mounting national debt that is projected to hit $20 trillion by the end of Obama’s term. We continue to have $1 trillion annual budget deficits. Taxes are crippling the economy, making it more difficult for middle class Americans to be upwardly mobile. The President and his party were re-elected by an underclass of people dependant on government for just about everything in their lives. Obama pays lip service to getting the long term unemployed back on the payrolls, all while increasing the number of people on social security disability more than any other President in history. It pays to have a dependant underclass when you’re a Democrat.

Our nation is facing a bleak economic future. Britain is entering a third dip recession, Europe generally is slowing down. China is slowing down. The US is facing its slowest economic recovery since the Depression. So slow, it’s not even a recovery anymore. Obama has no real economic plan, he lives in a fanciful world where he plays dictator to business, Congress and the masses of Americans. It’s a dream world that doesn’t exist but one that results in Obama offering nothing to fix the problems we have. We have a Congress that can’t deal with the lunatic in the White House and can barely deal with each other. As a group, Congress doesn’t have any solutions either. We’re in for a rough four years. One wonders if the American dream of upward mobility really is dead.

Filed under economy Tagged with , , , , , , , ,

Obama Administration Manipulates Unemployment Numbers

December 8, 2012 15 Comments

At this point the unemployment rate shouldn’t even be believed anymore. According to the government it now stands at 7.7%. Of course to get to that low number the government had to drop 350,000 people from the labor market. This seems to be a monthly occurrence during the last year. It’s hard to believe that 350,000 people every month drop from the labor market. The government alleges 146,000 new jobs were created in November. That’s nice but it doesn’t even keep up with the 150,000 jobs needed due to population growth, to say nothing of replacing the millions of jobs lost during the recession. The fact is these are not very good economic numbers.

The private sector isn’t doing very well despite all the rah rah talk from the media. During the last 5 months 73% of the jobs created weren’t in the private sector, they were created by government. Around 850,000 new jobs have been created since June, 621,000 of them in government. Which means of course that actual new jobs created by the private sector don’t even hit 250,000 since June. Growth in the private sector is slow, things are not as great as the media is portraying them. The government is manipulating unemployment numbers all while creating jobs for itself and pretending they’re private sector jobs.

The economic outlook of the country is only going to get worse. Obamacare is already effecting how businesses are hiring. In some cases Obamacare is causing businesses to cut back on the number of hours their employees work so that the business isn’t hit with Obamacare taxes. In other cases smaller businesses aren’t hiring because they don’t want to be saddled with massive Obamacare taxes. Millions of middle class Americans are getting ready to be hit with the Obamacare individual mandate tax regardless of what happens with the fiscal cliff negotiations. All is not well in the private sector despite all the rosy rhetoric from the press.

The fiscal cliff negotiations aren’t helping matters at all. What we’re going to see in the next few weeks is a lot of cash shift in the marketplace with businesses handing out dividends early in anticipation of a tripling of the dividend tax in 2013. We’re going to see upper income Americans shift their investments around so they can avoid 2013 taxes. Tax exempt investments will suddenly go up in value because of the pending fiscal cliff. It appears the Republicans are going to cave on at least a portion of the tax cuts for the wealthy, removing at least $80 billion from the private sector. Likely it will remove a lot more because of investment shifts, which in the past tend to favor tax exempt government bonds.

The private sector is not in good shape. We have major private sector problems, most of which have been created by government. Great Britain increased taxes on the wealthy to 50% and a year later they’re going to cut them because it destroyed their economy. The same is going to happen here, increasing taxes isn’t going to help create jobs. When the government has to manipulate unemployment figures by removing 350,000 people every month from the labor market and when 73% of new jobs are government jobs that ought to be a clear indication that not all is well in the private sector. Obama is setting up another recession via government policy but we’ll pretend it isn’t happening as his government creates jobs for itself and manipulates workforce numbers.

Filed under economy Tagged with , , , , , , ,

Another Recession Is Right Around The Corner

November 16, 2012 2 Comments

The fiscal cliff is just around the corner. New jobless claims increased 78,000 last week despite Obama’s re-election. Inflation is on the rise. Poverty has increased. Europe is in a recession. McDonald’s is seeing their sales decrease. Don’t be fooled, this doesn’t mean people are eating more nutritious lunches or that they’re spending money at higher end restaurants like Applebee’s. (did I just say Applebee’s is high end? oy) It means that people can’t afford to eat at a restaurant that historically performs well during recessions. It’s not like they’re running over to Burger King or Wendy’s, their sales don’t make up for McDonald’s losses.

At least one restaurant chain owner is going to charge an Obamacare surcharge. We’re beginning to see what’s going to happen thanks to Obamacare. Taxes are going up for thousands of middle class families thanks to Obamacare. Businesses are cutting back on employee hours in order to not be subject to Obamacare. Many small businesses are making sure they don’t have 50 employees and thus aren’t subject to Obamacare. They’re laying off employees and refusing to hire. All of this while stocks are dropping into recession territory, the dollar is falling, unemployment is going up and historically strong companies are losing sales.

We face a major tax increase on January 1st. Odds are that Congress and the President aren’t going to agree on much, if so middle class families will see a major tax increase. Meanwhile high income earners are pulling their money from investments so as not to subject themselves to higher taxes next year. All of this money is going to be taken out of the private sector, furthering a brewing recession. Nothing can be worse for an economy in recession than removing money from the private sector. How does Obama and the Democrats think businesses will hire people if they have no money?

But of course that question assumes Obama and the Democrats care about Americans working. The last four years suggest that they really don’t. Obama won re-election on food stamps and welfare. Voters on food stamps account for nearly 75% of Obama’s votes. So let’s not pretend like Obama particularly cares about jobs. In fact, the fewer people who are employed the better it is for the Democrats. After all jobs, especially good jobs, remove people from the welfare and food stamp rolls and thus those voters are less likely to vote for Democrats. All you’ll see from the left is more food stamps, more welfare, more handouts and fewer jobs. It’s their pathway to re-election.

For the rest of us, we’re looking at a looming disaster. The middle class is facing thousands of dollars in tax increases on January 1st. If we don’t have health insurance, there are thousands of middle class Americans facing the Obamacare tax. Our jobs are threatened as our employers cut back with Obamacare and upper class tax increases looming. We have nowhere to turn. We make to much to go on welfare and we actually want to work, lessening our will to join the ranks of welfare recipient. The country is facing a disaster and we have a President who just doesn’t care. He doesn’t have to, welfare and food stamps got him re-elected. Not even his dismal economic performance could overcome the freebies the government handed out.

Filed under economy Tagged with , , , , , , ,

We Enter The Final Days Of The Campaign

November 2, 2012 Leave a comment

Romney is headed to Pennsylvania on Sunday. The Romney camp must think he has a shot in there, otherwise they wouldn’t be sending the big guy out to Philadelphia. Paul Ryan is going to be campaigning in Minnesota as well. They must think Romney has a shot at Minnesota, just not as big a shot as Pennsylvania. Frankly, all of it is hard to believe. Pennsylvania hasn’t gone Republican since 1988 and Minnesota hasn’t since 1972. We’re supposed to believe that Romney is the guy who can break through the great blue barrier. With Ohio increasingly moving towards Obama, perhaps team Romney really has no other choice.

President Obama failed to convene the counterterrorism task force during the Benghazi attack. We have a siege of a consulate that went on for nine hours, two hours in the White House had information that al Qaeda associated groups were involved and the counterterrorism task force isn’t convened. We could have had air support from Italy in Benghazi within an hour, it was never ordered. We had drones overhead taking pictures that could have fired on the terrorists and it was never ordered. We had a CIA house up the street that could have attacked, they were told to stand down.

We’re told there was confusion between the State Department and CIA during the attack. The Obama administration has had four years to work out dealings between various departments. Surely someone would have planned for a potential attack on an embassy or consulate. Such attacks aren’t out of the realm of possibility. Yet it’s clear that neither the State Department or the CIA knew who was in control of the situation. You can through the military in there as well, they had no idea what they were supposed to do. All three departments are waiting for orders from the President and they never came. This man is going to be re-elected next week, it should make people very nervous.

The unemployment rate ticked up to 7.9% in October. Around 171,000 jobs were added though the BLS had to remove around 250,000 part time jobs from September which weren’t actually in existence in the first place. The number of people unemployed stayed largely the same, as did the U-6 figure which includes unemployed and underemployed workers. The jobs report isn’t exactly terrific. It barely makes up for population growth during the month. We need many months of 300,000-500,000 jobs added just to make up for population growth and the number of jobs lost during the recession. We’re looking at 1.3% economic growth, a real recovery would have 5% or higher growth.

Obama’s economic policies have failed. They haven’t led us out of the recession and they haven’t resulted in substantial job creation. When we have 12 million who are counted as unemployed, who want jobs and we only create 171,000 in a month, that barely makes a dent in the unemployment figures. We have 23 million who are either unemployed, underemployed or simply not counted because they’ve given up looking for a job because they can’t find one. Suddenly creating only 171,000 jobs doesn’t really look so great.

Despite the dire economic situation our nation faces and the disgraceful handling of Benghazi, Obama is a near lock for re-election. We Republicans can sit around grousing about poll bias, yours truly may even dabble in it now and then. But the fact is that Romney is down in every poll but one in Ohio and he’s never had a lead in Pennsylvania, Michigan or Minnesota. At best he’s tied in Wisconsin where Romney doesn’t have a tenth of the enthusiasm as Scott Walker had. We need to come to grips with the fact that the only thing standing between us and an out of control lame duck Obama is a GOP House. We can only pray they stand firm.

Filed under 2012 election Tagged with , , , , , ,

Media Protects Obama, October Surprise Coming

October 29, 2012 12 Comments

Obama is likely to win the election next week. He’ll have spent hundreds of millions on television ads. In fact odds are Obama will have more ads on television than Romney despite spending less. This is largely because of the Romney campaign’s foolish handling of ad buys. But all that money spent isn’t what will win him the election. Obama will win the election in part because the GOP picked the wrong candidate. He’ll also win because the mainstream press protected him from the Libya disaster and because as President he has the ability to produce an October surprise.

For all the press has done to protect Obama on Libya you would think he at least owes them a fruit basket. The media has covered this story up for the President from day one. CBS for example did a 60 minutes interview with Obama the day after the Benghazi attack in which the President said the attack was a terrorist attack. CBS just happened to edit that statement out because the White House narrative had become the video. Now that the administration has changed its mind, CBS aired the unedited portion of the 60 minutes interview. Now Obama can run around saying that he said it was terrorism all along and that Romney is a real liar.

Brian Williams did an interview with Obama last week and never got around to discussing any details about Libya. This is typical of the mainstream press. They bought the video story from day one, when the video story changed the press didn’t question Obama’s change in story. During the first week after the Benghazi attack the press spent more time attack Romney’s response than questioning what Obama was doing. All of this has greatly benefitted Obama. You can bet of course that if John McCain were President and this had happened in Libya the press would have ripped him to shreds. It would have been the new Watergate. With Obama, the press ignores the story.

There is likely to be an October surprise this week. It will come from the Obama camp. The administration tried to lay the groundwork for a surprise earlier this month when reports surfaced that the US would have direct talks with Iran. However that plan was foiled when Israel stamped their feet and various Republicans went on the attack. Obama was forced to say the report was inaccurate, even though it likely came out of his White House.

Obama can go a number of ways with an October surprise. He could manipulate the unemployment figures which are due out on Friday. There is widespread speculation that the September figures were inaccurate and manipulated, there wouldn’t be anything stopping Obama from doing it again. Isn’t it interesting that Obama never brought up the 7.8% unemployment number in a debate? Isn’t it interesting that he isn’t talking about it on the campaign trail? Granted 7.8% isn’t great but it broke the psychological 8% barrier. Why isn’t he talking about it?

Let’s say the unemployment figures go up this month to above 8%. There is a simple way for Obama to get that discussion out of the media. He could bomb a terrorist target in Libya. Whether it’s a real terrorist target won’t matter four days before the election. Americans love to rally around the President when he’s bombing bad guys, real or otherwise. Bill Clinton bombed an aspirin factory in Sudan during a low point in his administration. Obama in 2010 announced four days before the midterm elections that bombs being sent via UPS had been discovered despite the fact that the intelligence community wanted that information kept confidential so they could track down the terrorists. The President, in fact any President, has the ability to sway an election via use of military force or an announcement of some seemingly important arrest or discovery.

What Obama will do this week is anyone’s guess. He could spend the week in the White House ‘monitoring’ hurricane Sandy and look presidential in doing so. He could of course leak some horrible piece of information about Romney, though that seems unlikely given Romney’s lifestyle and apparent honesty. Obama is more likely to try to sway people via the power he has as President. I would expect an arrest in Libya, a bombing in Libya, an announcement of some sort of deal or agreement to negotiate with a rogue nation somewhere in the world or a pouring out of Federal money (real or imagined) for the states affected by hurricane Sandy. There will be an October surprise, we have to wait for it to happen and hope the Romney camp has an adequate response.

Filed under 2012 election Tagged with , , , , , , ,

8.2 Million Removed From Labor Force Under Obama

October 16, 2012 Leave a comment

The economic news in this country hasn’t been good throughout the Obama administration. Second quarter growth was just 1.3%, manufacturing orders and orders for durable goods are down substantially in recent months. QE1 and QE2 failed while QE3 is destined for failure. The Stimulus was a massive failure. Income is down $4,000 during the Obama years while prices are up. There are 48 million Americans on food stamps. If we blindly follow the government’s 7.8% unemployment claim, there are millions of unemployed Americans. If we subscribe to the U-6 unemployment model, the number of millions of unemployed Americans nearly doubles. The economic disaster has been sustained throughout Obama’s years.

The number of Americans in the workforce has barely increased during the last four years. We know that despite claims of 4 million jobs created, the fact is that the number of employed Americans is less than 300,000 more today than it was at the beginning of the recession. Couple this with recent claims from the government about the number of people in the workforce and the unemployment rate and the numbers don’t add up. The following chart was produced by Sen. Jeff Sessions, it demonstrates what the government has done with the unemployed during the last four years:

For every American added to the labor force over the last year, nearly 10 were added to the tally of people not in the labor force. That’s how the government came up with the 7.8% unemployment rate last month, they simply removed 350,000 people from the workforce. Unfortunately the numbers don’t mesh with reality. We need to create 150,000 jobs every month just to keep up with population growth. That is on average how many more people enter the workforce each month than leave it. In other words, we don’t have a sudden increase in retirements that explain these numbers. The government is simply removing people from the workforce to make the jobs market appear more stable and less of a problem than it really is.

One of the chief problems with the jobs report every month has been the small number of jobs created. We had a summer of less than 100,000 jobs created each month, September only saw 114,000 jobs created. Those numbers don’t keep up with population growth. Rather than count new people in the jobs market as unemployed, the government is shifting them into the ranks of people not in the job market. Then they don’t count as being unemployed, thus the unemployment rate drops. But it doesn’t actually drop, it actually increases because new members of the job market (usually young people) want jobs but cannot find employment.

One of the reasons Obama is having trouble whipping up enthusiasm among the young is because of the jobs market. The unemployment rate might not count young, new entrants into the job market as unemployed but the people they aren’t counting sure do feel unemployed. Believe it or not young people don’t want to live in their parents basement playing video games and wasting their lives away. They want to work, they want to be independent, they want their own home. Obama hasn’t worked out for them and they know it. It’s why fewer young people will go to the polls in three weeks and it’s why of those who do go to the polls a smaller percentage will vote for Obama. The government might fool people with a job into thinking unemployment is down to 7.8% but the government isn’t going to fool those who aren’t being counted and want jobs.

Filed under 2012 election Tagged with , , , , , , ,

New Unemployment Rate A Political Fraud

October 5, 2012 2 Comments

The media will no doubt trumpet the new 7.8% unemployment rate as evidence that Obama’s policies are working. Unfortunately the new 7.8% figure is a political fraud. The numbers don’t add up. The government claims 114,000 jobs were added last month, which isn’t all that great of a number. This resulted in a 0.3% drop in unemployment? That isn’t believable in the least. The ranks of the unemployed decreased by 456,000 last month. Well wait a minute, how does that figure decrease by so much when only 114,000 new jobs were created? The government is tossing 340,000+ people out of the job market in order to boast unemployment is down. It took me all of 30 seconds to figure out what they’re doing. Unfortunately the press will only report the 7.8% number.

CNBC claims the numbers are tame and they’re confused by all of the contradictory figures. This report is overtly political. It’s meant to secure Obama’s re-election. Just wait, the November surprise we’ll get when the October jobs report is released on November 2nd will be even worse. Magically unemployment will be below 7.5%. That the government threw half a million more people out of the job market will be ignored. Just in the last two months the government has claimed that over 500,000 people are no longer in the job market. Where are they? Did they leave the country? Surely they aren’t all women who have decided to stay at home with their kids.

In fact, the numbers are even worse than this. We need 150,000 new jobs every month just to keep pace with population growth. Each month new kids graduate college or high school, jobs need to be available for them. When 114,000 jobs are created that means we aren’t even keeping pace with population growth. Sure, some people are retiring and that offsets the number. But a lot of people are foregoing retiring in this economy. Romney was right during the debate 50% of college graduates can’t find a job out of college right away. These people are either going directly to the ranks of the unemployed or the government simply isn’t counting them.

The real telling figure from the government is the U-6 report which indicates that real unemployment remained at 14.7% last month. U-6 includes people who have given up (like the 340,000+ the government doesn’t count in the official unemployment rate) and people who are underemployed. In other words, the economy isn’t really getting better. Instead the government is manipulating the numbers to favor an incumbent President.

Mitt Romney needs to issue an ad today attacking the new unemployment rate. He needs to focus on the 340,000+ that the government simply removed from the job force. The ad should make it clear 114,000 isn’t good enough. If we had a real recovery we would be creating jobs at the rate of 500,000 a month like we did during the Reagan recovery. What we have now isn’t a real recovery, it’s a stagnation. Romney has to make these points loud and clear over the next couple of days otherwise any bump he would have received from his debate victory will be lost.

This sort of nonsense job reports shouldn’t surprise any of us. It was entirely predictable. It’s a good example of why government really shouldn’t be in the business of labor statistics in the first place. These statistics are easily manipulated to favor those already in power, no matter the party. In fact, the government has changed the formula so that the U-6 rate, which used to be the official unemployment rate, is no longer used officially. Why? Because it hurts the incumbent as it is always higher than the current version of the unemployment rate. The question now is whether the public will pay attention to the September number or whether they’ll wonder how it dropped so much when only 114,000 jobs were created. My guess is that they’ll pay attention to the number alone.

UPDATE: It appears that several Bureau of Labor Statistics economists are donors to Obama’s re-election campaign. Is anyone at all surprised?

Filed under 2012 election Tagged with , , , , , , ,

← Older posts

Follow

Get every new post delivered to your Inbox.

Join 141 other followers